An announcement of the agreement is imminent, although no
deal has been signed, said the people, who asked not to be named
because the decision isn’t yet public. The games will be carried
on a new regional sports network developed by Guggenheim
Partners, which bought the Dodgers for $2.15 billion last year.
As a partner in the project, Time Warner Cable will run the
network and sell the advertisements, although it won’t own the
television rights outright, the people said.

The deal would snatch the rights away from News Corp., the
media company controlled by Rupert Murdoch, which has been
paying about $40 million a year to broadcast the games. The
Dodgers negotiated with News Corp.’s Fox and Time Warner Cable
for months before reaching an agreement. A lucrative new
contract should help add luster to the team, said Lee Berke,
head of a sports-focused media consulting firm.

“From a Dodgers standpoint, this puts them at the same
rank as the Yankees, Red Sox and Giants,” Berke said.
“Valuation is the name of the game. That’s what Guggenheim is
going to achieve by developing a Dodgers network with Time
Warner.”

Lakers Network

Time Warner Cable may pay around $7 billion for the TV
rights over the term of the contract, the Los Angeles Times said
yesterday. The agreement would build on Time Warner Cable’s 20-
year deal with the National Basketball Association’s Los Angeles
Lakers. That partnership, formed in 2011, became the linchpin of
two regional sports networks -- in English and Spanish.

Like that deal, the Dodgers contract will cover about 20
years, one of the people said. The partnership is expected to be
announced in the next two days, according to the person.

Irene Esteves, chief financial officer at the New York-
based cable company, said last year that Time Warner Cable is
interested in sports rights as a way of avoiding high rate
increases from other owners, including Fox and Comcast Corp. (CMCSA)

Securing the Dodgers rights allows Time Warner Cable to
charge other pay-TV companies, such as DirecTV (DTV) and AT&T Inc. (T)’s
U-verse, to carry the network. Any provider that doesn’t offer
the Dodgers channel risks immediately losing subscribers to
competitors, said Ed Desser, a TV sports-rights consultant who
advised the Lakers in their negotiations.

‘Must-Have’

“It’s must-have programming,” Desser said. “There’s just
not a lot of other stuff out there.”

Stan Kasten, president of the Dodgers, and Pat Courtney, a
spokesman for Major League Baseball, declined to comment.

Fox Sports started a business that became known as Prime
Ticket to carry the Dodgers in 1997. Fox still has the rights to
MLB’s Los Angeles Angels, the NBA’s Los Angeles Clippers, and
the National Hockey League’s Los Angeles Kings and Anaheim
Ducks.

Guggenheim Partners purchased the Dodgers in an auction
after former owner Frank McCourt put the team into bankruptcy in
June 2011, when a cash crunch threatened to prevent the company
from making payroll. Before going into default, McCourt turned
to Fox Sports for a financial lifeline. McCourt negotiated a 17-
year, $3 billion contract extension of the Dodgers broadcast
deal with a $385 million upfront payment that would have
provided liquidity to the team and enabled him to pay a divorce
settlement to satisfy personal debts.

Selig’s Rejection

MLB Commissioner Bud Selig rejected the deal, which would
have paid the Dodgers $84 million in rights fees in its first
year, saying in a letter that a desperation-driven contract
“failed to fully maximize rights fees through a competitive
process.” McCourt put the Dodgers into bankruptcy a week later.

Since then, other transactions have underscored the value
of TV rights to major sports franchises, including the New York
Yankees and the Cleveland Indians. In November, News Corp.
purchased 49 percent of the YES Network, the cable channel that
carries Yankees baseball games. The transaction valued the
regional sports network at about $3 billion.

The Yankees deal puts News Corp. in position to extract
higher payments from Time Warner Cable -- a situation the cable
company is looking to avoid with the Dodgers. News Corp. (NWSA) will
renegotiate its carriage fees with Time Warner Cable for the YES
Network in the first quarter of 2014 and will probably ask for a
significant increase, a person familiar with the matter said.

Time Warner Cable is the largest pay-TV provider in
Manhattan. The YES Network charges an average of $3.20 per month
per subscriber, according to research firm SNL Kagan.